Alzheimer?s disease (AD) is the most prevalent neurodegenerative disease in the world, characterized by a progressive loss of cognitive functions leading to dementia. Hallmark pathological features of AD are amyloid plaques, caused by abnormal accumulation of amyloid-? (A?), and neurofibrillary tangles consisting of hyperphosphorylated tau. However, it has been difficult to assign a causal role to these features in sporadic AD, and it is increasingly accepted that AD is a multifaceted disorder driven by aging and dysfunction in many cellular pathways. Recently neuroinflammation, in particular microglia dysfunction, has been shown to be an essential component in the development of functional deficits in AD. Remarkably, new reports suggest that in the aged and diseased brain different microglia subsets with unique transcriptional and functional signatures co-exist, which can be protective or detrimental for the brain. Consequently, it is of high importance to identify and target those microglia subsets that are dysfunctional and ?harmful? for the aging and diseased brain such as AD. We recently identified a novel, lipid-droplet containing microglia (LAM) subtype in the aging brain. Lipid droplets (LD), which are neutral lipid storing cytoplasmic organelles, are increasingly recognized as structural markers of inflammation. Yet surprisingly, LDs and their role in brain myeloid cells- especially in the context of AD pathogenesis- have been completely neglected so far. We discovered that LAM represent a dysfunctional, pro-inflammatory state in the aging brain and further identified genes that have been previously linked to neurodegeneration (SLC33A1, SNX17, PGRN) as genetic modulators of LD formation in microglia. These results suggest that LAM represent a detrimental microglia state in the aging brain and in AD that exerts a critical role in age-related neurodegeneration. This current study will characterize the molecular and cellular signature of LAM in aging and AD. Further, using microglia transplantation techniques, we will study whether LAM are the result of environmental determinants or whether LAM can instruct their environment. Lastly, using genetic models to regulate microglial lipid formation, we will determine molecular regulators and functions of LAM in aging and AD model mice. Ultimately, these studies pursue the innovative concept that lipid droplet containing microglia play an important and overlooked role in Alzheimer?s disease, and that targeting LAM may provide a promising approach for therapeutic intervention.